How do you complete the Schedule T for Cross Tested Plan. If everyone is benefiting do you check 3(d) or do you not check any exception, complete Item 4, and mark Average Benefit Test? In our plan all employees benefit but we have to do the Avr Ben Test. Do we have to show less than 70% on line 4(d) to be able to check Ave Benefit Test in 4(f)2?

We just acquired a plan that is age-based. The determination of the Allocation Points requires us to, first, multiply comp by the annuity purchase rate, and then, second, to discount step one by 8.5% from the participant's normal retirement age (age 65). THe result is the Allocation Points.

I have a participant over age 65. Am I correct that her allocation points are simply the product of step one because no discounting is possible? Or does table "Adjustment to Actuarial Factor for Normal Retirement Age Other Than 65" somehow come into play?

Thanks.

If you were in the business of approving hardships, what kind of supporting documentation would you request to approval a hardship for medical expenses? Would an Explanation of Benefits suffice? How about a letter from a collection agency? Would you always require a bill stating the type of service rendered and date service was performed?

Thanks!

Can the non-taxable portion of a distribution from a terminating defined benefit plan which consists solely of previously reported PS-58 costs be rolled over under the same rules that apply to distributions of after-tax employee contributions? These distributions are post EGTRRA and the insurance contracts were surrendered by the Trustee and cash values invested in the plan trust Are the rules any different if the plan is not terminating and the distribution is being paid to a terminated employee?

Situation: existing cross-tested PS plan. Has required 5% NHCE allocation to meet gateway.

Client wants to add a stand alone 3% safe harbor 401k prototype.

Question: Can the 3% be used as part of the 5% gateway?

I'm sure this is a basic question, but I'm not fairly familiar with QMCSOs. Does the law require a plan to add a child regardless if the employee completes an enrollment form?

Target benefit plan is a prototype document. ONe portion of the adoption agreement entitled "Target Benefit Formula" states that " A participant's monthly retirement benefit shall be equal to 12% of such participant's average monthly compensation." E/er wants to terminate the plan as of 12/31. E/er will fund this year. My thinking is that in order to terminate the plan not only would the e/er need to do a consent of directors re termination, but that the adoption agreement regarding the e/er providing funding to give a participant 12%...needs to be amended such that it reads 0%... That way even if there is a problem with the termination, eg, assets not distributed in a timely fashion, etc...., then the e/er will still not be obligated to fund.....? Any suggestions? Thanks in advance.

ERISA Section 4045 authorizes the PBGC to recover the portion of lump sum amounts distributed in the 3 year period prior to distress termination that are greater than the life annuity that would have been paid if elected instead of the lump sum.

Does the PBGC frequently use this authorization?

The plan in question is a small plan (13 monthly retirees and 6 vested terms) that has offered lump sums for a long period of time.

The vested term wanting a lump sum is not a decision maker with the plan sponsor (not an hce, owner, key, etc.). The lump sum is not being asked for in anticipation of a distress termination which may or may not occur in the next year.

Any thoughts or experience would be appreciated.

The current thought is to pay the lump sum but caveat it with a cite of ERISA Section 4045 indicated the PBGC ability to recover certain amounts.

A broker I work with has a client that just terminated the company 401(k) plan and will start a SIMPLE 1/01/04. The client was told by its TPA that balances could not be rolled over from the terminated 401(k) plan into the SIMPLE. I disagree, but respect this particular TPA, so thought I would ask if I'm missing something. Thanks.

Under the modified regs that came are you still required to give 90 days notice when removing this benefit?

I am looking for a sample form for RMD that incorporates any spousal consent, options. etc.

Thanks, Sue

I am looking for a source (web site or other) that I can pull some 401(k) statistical data from. What I am looking for is avg. account balance, avg. deferral rate, avg. deferral contributions, and avg. participation. I am hoping to get this information broken out by HCE vs. NHCE and if we can get by age as well I would be grateful.

I have the PSCA 45th annual survey and the Deloitte & Touche 2002 annual but neither of these has this breakdown.

Any help would be appreciated.

A company, currently in Chapter 11 reorganization is in the process of being sold. The current collective bargaining agreement was extended until January prior to its expiration. The purchaser of this company is not assuming any contracts, including the CBA. The employer who signed the CBA is going to be starting up another company and will likely be hiring the employees from his former company. As he is the principal of the old company (that is being sold) as well as the principal for the new company, can this CBA be transferred to the new company or does a new CBA need to be drafted and signed?

Please let me know if my thought process is correct:

I was considerring writing in 5% as Group B's allocation in the plan document, with the understanding that it would probably fail 401a4 in future years. I believe that by writing the formula into the document I can avoid bumping up group B into a higher percent, and hand pick individuals to bump up to receive the higher allocation by making a corrective amendment after the plan year of allocation.

I have 2 companies in a plan. One individual owns 65% of X and 100% of Y. The plan has a new comp formula and I only want to give Y the minimum gateway allocation.

Can I exclude Y from 401a4 since it's not a CG?

Can I give Y just the top-heavy minimum 3% and no gateway if the common owner only gets a 9% ps allocaion, but the other HCE's received 25%?

What if Common Owner makes 200k in both company X & Y. We allocate 40k to his X comp, and want to allocate 0% to Y's eligible comp, could we allocate nothing to Y?

Do you consider the value of Group Term Life Insurance in excess of $50,000 to be a "fringe benefit [cash and non-cash]" or "welfare benefit" for purposes of compensation exclusions under 1.414(s)-1©(3)

I have a profit sharing plan with the following employees:

Employee 1 - 49% ownership

Employee 2 - (spouse of Employee 1) - 49% ownership

Employee 3 - (child of Employee 1 & Employee 2) - 2% ownership

Employee 4 - (spouse of Employee 3)

Is this considered a "one-participant" plan?

I have a single physician whose entire staff consists of "leased" employees from the hospital group. There is no ownership issue between the hospital and the physician. Most work for him 100% of the time, and I understand they would be covered by his plan, but there are several who work only 25% - 33% of their time for this physician.

As there is no controlled/affiliated service issue, could those few employees working on a less than "substantial full time" basis be excluded from the plan?

We have a potential new client that currently has 2 401(k) Profit Sharing Plans. One is for Associate Attorneys only and the other Plan is for the Partners and Staff. The Associates Plan only has Elective Deferrals and the Partner's Plan has Deferrals, Safe Harbor Non-Elective and Profit Sharing. The Partners Plan is top heavy but they have not aggregated the Plans for testing or the minimums. My question is: They want to add cross testing to the Partners Plan. How does that affect aggregation/401(a)(4) testing?